New nightly builds of Safari's bleeding-edge doppelgänger, WebKit, are getting some new support for CSS animations -- support that's already available in MobileSafari.
The animations, which include a falling leaves effect, a way to simply animate objects sliding across the screen, and a "pulse" effect (described as "the new <blink>") are all supported by WebKit. The WebKit blog shows code examples about how to use these behaviors in your own sites.
MacRumors's Arnold Kim suggests that Apple may be looking to obviate the need for Flash on the iPhone and iPod touch through the implementation of web tools like CSS Animation. I would argue that while CSS is powerful, getting Flash on the iPhone is about one thing and one thing only: Games.
Flash games have been a free, popular timewaster for years: perhaps knocking centuries off our aggregate productivity. Behind their playful exterior are mountains of code and graphics: multiple player interaction, powerful 3D rendering, score storage, and custom type. If someone asked me (as a web developer) to build FlashCat as a standards-compliant game with CSS Animation, I think I'd choke.
Yes, high-powered Flash applications exist too, pulling data from databases, presenting video, and providing a way for design-conscious web designs to use custom fonts. All of these can be solved through open-source methods (or QuickTime), with an appropriate time investment. Anecdotal evidence suggests that games, however, blow apps out of the water in terms of popularity.
I wouldn't be surprised, personally, if Apple was dragging its feet on implementing (or approving an implementation of) Flash on the iPhone if only to bolster sales of games through the App Store. Giving people a free way to play games they already know and love cannibalizes sales away from the 99-cent timewaster apps that Apple makes a bundle on.
Nevertheless, While CSS Animation is an excellent addition to the standards-compliant web developer's tool shed, Apple isn't using it to bypass Flash. While Flash needs to come to the iPhone and iPod touch -- like all things related to this platform -- it will be on Apple's terms.